Tech Firms Helped Shape the New Labor Model — But They Need to Keep Evolving Themselves

Gordon Tucker, Managing Director Global Leader, Technology, Media and Telecommunications Industry Practice
Kurt Underwood, Managing Director Global Leader, Managed Technology Solutions

Technology companies know all about the need to stay nimble and scale fast to respond to change. They also know well the persistent challenge of trying to assemble enough skilled and diverse talent to help them fuel innovation and growth. To achieve both objectives, many tech firms were among the first to embrace the concept of the “shamrock organization” — a decision made by both necessity and choice.

Technology companies have long been avid users of the contingent workforce — and to great effect. Many rely on interim, contract and freelance professionals for projects of all sizes, and value the ability to engage that talent on demand. That fact, and the very nature of what tech firms do, have both had a direct impact on the evolution of the new labor model for the digital age.

As explained in a recent issue of Protiviti’s Board Perspectives: Risk Oversight newsletter, the new labor model is being shaped by the increasing mobility of talent, the growth of the contingent workforce, the expanding availability of high-quality service organizations and, of course, technologies that enable digitalization. Those technologies include cloud computing platforms and applications, robotic process automation (RPA) and artificial intelligence (AI).

The philosophy of the new labor model is to focus a small, highly paid and highly capable professional core of workers on the delivery of mission-critical services, with other non-customer-facing operational functions, like finance, supported by other resources, including technology solutions. Organizations —and not just technology firms — are gravitating to this model so that they can create a more complex “talent ecosystem” for their business that extends beyond their traditional organizational boundaries.

Tech Leaders Need to Keep a Close Eye on Changing Workplace Dynamics

For technology companies, the new labor model has created obvious opportunities — but it also presents risks. The opportunities include more flexibility and creativity in developing and delivering the technologies that, in turn, can further enhance the capabilities of the expanding workforce, and which will allow businesses to confidently automate processes and make the most of their human capital.

As for the risk, consider this: Enabled by the new labor model, tech companies are helping more businesses transform into technology companies. Essentially, they are creating more competition for the internal and external resources that they need to compete.

So, the key message here is that even leading technology companies, which enjoy being a magnet for top talent, need to rethink their staffing strategies in the face of a new labor model that they have helped to shape. They also need to consider how they, too, can use emerging technologies, such as RPA or AI, to operate more efficiently. This will enable firms to dedicate their best people to the front lines of innovation for their business, and better support the freelancers, contractors and specialized service providers they have come to rely on — and will need even more in the future.

Many tech firms will likely find that engaging highly skilled external resources on demand is the most logical strategy for implementing new business systems and tools and ensuring they deliver intended value. Looking to these resources to take the lead on project management, staff training and other vital activities that ensure project success will enable tech firms to remain focused on front-end innovation while continuing to evolve their back-end operations.

Technology leaders need to stay on top of these changing workplace dynamics and respond appropriately, as their actions — or inaction — can significantly impact their firm’s long-term survival. Success in the digital age isn’t just about pursuing digitalization. It’s about assembling the right people, from all available sources, and then using the right technology solutions to ensure those people are put to the best and highest use for the business.

To read more on this topic, download “Oversight of Workplace Dynamics—The Labor Model,” Board Perspectives: Risk Oversight, Issue 105, from Protiviti, available here. Learn about Protiviti’s Technology Industry services.

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